Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. First Liberty Power Corp (1415305) 10-Q published on Jun 23, 2014 at 2:40 pm
Reporting Period: Apr 29, 2014
Derivative financial instruments, as defined in ASC 815, “Accounting for Derivative Financial Instruments and Hedging Activities”, consist of financial instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets.
The Company does not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, the Company has issued financial instruments including senior convertible notes payable and freestanding stock purchase warrants with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by ASC 815, in certain instances, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements.
Under the Arabia Agreement, the Company is required to pay Renaissance Exploration a) an amount of $10,000 plus reimbursement costs of all mining claim maintenance and lease fees paid in the past year and a commitment to pay the 2014 claim and lease fees prior to the effective date (the “Payment). In addition, in order to vest 100% interest in the property, the Company is also required to pay b) $22,500 at the beginning of month 4, 7, 9, 11 in the first year of agreement as well as to pay all land maintenance and obligation costs 60 days prior to their due date, and c) a minimum of $50,000 in exploration and development expenses within each of the first two years of the ten year term. As of April 30, 2014, The Company has paid a total of $35,333, which consisted of $12,833 related to reimbursement costs of all mining claim and lease fees and $22,500 related to the month 4 payment.
On March 30, 2014, the board of directors approved, and on April 4th the Company filed a Certificate of Designation with the Secretary of State of the State of Nevada, which sets forth the rights, preferences and privileges of a class of the Company’s preferred stock. Such class was designated as the “Series A Preferred Stock” and the number of shares constituting such series was 5,000,000 shares. Holders of Series A Preferred Stock will be entitled to a preference over all of the shares of the Company’s common stock of the Company and shall rank pari passu with any other series of the Company’s Preferred Stock. The holders of common stock and the holders of Series A preferred stock vote together as a single class with the holders of the Series A preferred stock having eighty (80) votes per share of Series A preferred stock and the holders of common stock having 1 vote per share of common stock. The shares of Series A Preferred Stock shall be convertible, at any time, and/or from time to time, with each one (1) Series A preferred share convertible into one (1) share of the Company's common stock, par value $0.001 per share. No shares of Series A preferred stock have been issued as of the filing date of this report.
As a result of the acquisition of G8MI on August 22, 2012, the company assumed an installment notes payable associated with a property purchase agreement (”Agreement”) from Dan Crofoot and Chaowalit Pullapat. The agreement was for the purchase of two parcels of property, located at 5833 and 5815 Upper Valley Road, Lovelock NV 89419. The properties are currently occupied by Stockpile Reserves, LLC. The total purchase of the properties is $495,000 to be paid over 20 months from the date of the agreement. The payment terms were as follows: $25,000 2 days from signing of the agreement, $26,000(consisting of principal of $25,000 and interest of $1,000) during each of the months 2 through 19; and a final payment of $21,000 on month 20. Since the assumption of the Note payble, the company has paid a total of $103,000 in cash.
Revenues were $0 since inception. The Company did undertake a trial shipment in this current reporting quarter, for which the amount of $17,000 was invoiced and entered into accounts receivable in the fourth quarter. We received a partial payment of $8,500 subsequent to April 30, 2014. The balance of the payment is subject to final analysis of the ore shipped by the customer, and the amount of revenue to be recognized in the fourth fiscal quarter will be determined at that time.